Facebook Inc.'s Deals with Whatsapp (Coursework Sample)
Hightlight (bullet points) 2-3 reasons why/why not this deal makes sense for Facebook Inc. Hightlight 2-3 potential challenges you foresee ex-post the deal. What would you recommend Mark and his team to ensure success of the deal.
Total 4-6 Bullet points and short answers.
Facebook Inc.'s Deals with Whatsapp
Highlight (bullet points) 2-3 reasons why/why not this deal makes sense for Facebook Inc
This deal not making sense because
* WhatsApp's operating margins are very small, and it should not cost $19 billion.
Apparently, very few know WhatApp's operating margins. The indications are that the company turned a profit on its rumored $20 million in revenue. Arguably its single biggest expense is the 30% it pays Apple and Google to distribute its app. There are surely storage and bandwidth costs as its customer base grows. And keeping the software fresh requires some engineering talent.
* The other real problem with the deal is the flawed underlying strategy.
Buying WhatsApp does not solve Facebook's real problems, which involve buildings a bigger audience
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